Is This Any Way to Run a Country?

This week the Tunisian government fell as a result of corruption: too few people reaping financial gain while everyone else paid the bill. Compounded by high unemployment, the corruption became too much for the people. They were tired of getting the “fuzzy end of the lollipop.”

Governing is about designing legislation that benefits the country, the economy, and the people. Too often those in politics think it is all about them so they say and do things which hurt the country, from inserting expensive tax expenditures to big donors into legislation to how these politicos discuss – and often distort public opinion on – important issues that effect the entire economy.

Politics is not a popularity contest. Nor is it about governing based on polls. It is about deep subject matter knowledge and pragmatic thinking, rather than rash, simplistic promises to an often little informed constituency.

All too memorably, the GOP has promised to cut $100bn from spending in the current fiscal year. The idea is to bring outlays back to 2008 levels, in effect cancelling out the Obama administration.

Nice line, except that you cannot also cancel out the recession, which has unavoidably increased demands on the budget. It is also a little awkward that Republicans want to protect spending on defence, homeland security, veterans’ affairs, Medicare, Social Security – most of the budget, actually. And, whatever happens, no more borrowing and no new taxes. This programme, if you can even call it that, is nonsense.

No budget or appropriations were passed in 2010 for the current fiscal year. A so-called continuing resolution keeps the government running until the beginning of March. Republicans opposed a full-year continuing resolution, aiming to put pressure on the administration to change fiscal course early in 2011. The pressure is now on them instead. Within weeks, the party will have to spell out its own spending proposals for the rest of the fiscal year, or back off and lamely pass a continuing resolution of its own.

Next, sometime in the spring, public borrowing will run up against the statutory debt ceiling. Congress must vote to raise it, or else the government will default. Again, Republicans thought to use this to intimidate the administration. Meet our demands on spending, or we shut you down. That was the idea.

Tea Party true believers may be salivating at the prospect of the coming Battle of the Debt Ceiling, but the GOP’s leaders are dreading it. Shutting down the government is a button they dare not press – not if they retain the least grip on reality. They did it once before, during the Clinton administration, and were slammed: the shutdown rescued the Clinton presidency. To do it in 2011, with the economy laid low and financial markets still twitchy, would be the limit of irresponsibility. It would be betting the recovery to make a point. This time, political annihilation might follow, and the party would deserve it.

Avoid this they must, but how do they retreat from their campaign positions without being seen to climb down? My advice to them is simple: they cannot. The Republicans need to moderate their zeal to cut discretionary spending too much and too soon; they need to make the case for measured, long-term reform of Medicare and Social Security; and they need to advance tax reform that will raise revenue without pushing marginal tax rates any higher. The sooner they start climbing down the better. Otherwise, they will fall and go splat.